Parliament rejects key points of Yeltsin's budget proposal

With an international bailout package in the balance, Russia's parliament Thursday rejected key elements of President Boris Yeltsin's economic austerity plan.

The International Monetary Fund and other lenders want Russia to cut spending and improve its weak tax collection system before releasing funds from a multibillion-dollar loan package agreed to on Monday.Parliament's lower house, the State Duma, approved a bill setting forth the general principles for tax collection. But it rejected two important measures designed to raise revenues for the cash-strapped government - a land tax and a sales tax.

Finance Minister Mikhail Zadornov, in an address to lawmakers, said they had failed to support a program that could lead the country out of its economic crisis.

"The key points which should lead the country out of crisis have not been supported by you," Zadornov said.

The communists and nationalists in parliament generally oppose spending cuts and tax hikes, arguing they will hurt ordinary Russians.

Yeltsin's administration has sent more than 20 proposals to parliament, saying they are needed to ensure the loan package and end the country's latest financial crisis.

The lawmakers passed a number of measures Tuesday and Wednesday, but have balked at laws that would increase taxes.

Thursday was the final day of a special two-day Duma session devoted to the government's austerity plan, and lawmakers were expected to meet well into the evening.